Whilst the overall rate of inflation fell this month from 3.5% to 3%, figures just published by Alliance Trust Research Centre show the 50-64 year old age group continues to be hit by the highest rate of inflation — 4.5% – for the fifth month in a row.
Alliance Trust’s monthly study of differing inflation rates amongst varying age groups uncovers stark differences in the rates being faced by different age groups and also shows that the gap is growing.
Inflation for 50-64 year olds 50% Higher than Official Rate
50-64s are facing a rate of inflation some 50% higher than the official rate. This is mainly because this age group spends more in those areas where inflation is highest, such as transport which is running at 11% inflation and fuel at 22%. Older people spend almost 8% of their budget on electricity and gas bills; whereas in comparison, the under 30s olds spend just below 4% in this area.
Price Increases Reflect VAT Increase and High Fuel Costs
Head of the Alliance Trust Research Centre Shona Dobbie said, “Price increases over the last year have still been relatively high in the case of many goods and services, reflecting the increase in VAT, high fuel costs and the fact that the recent depreciation of sterling has pushed up the cost of imported goods.’
‘These price moves continue to have the greatest impact on the two working age groups who spend a larger proportion of their budgets on the goods and services which are currently seeing the highest price increases. Both working age groups still face an inflation rate in excess of 4.0%, while average earnings have only grown by 1.5% over the last year, highlighting the sharp erosion of purchasing power. This situation has been of great concern for several months now.’
Geoff Charles of Independent Equity Release Specialists Bower says: ‘Enjoying a retirement free from financial worry, despite the hike in inflation, could be possible for those aged 55 or over who own a property. A lifetime mortgage or home reversion plan could allow homeowners suffering from inflation related financial concerns to unlock cash from the value of their properties to supplement their income and enhance their quality of life in retirement.’
Equity release may involve a lifetime mortgage or home reversion plan. To understand the features and risks, please ask for a personalised illustration.
Bower is an FCA regulated independent financial advice company that offers specialist advice on equity release throughout the south of England. For more information e-mail [email protected] or call 0800 4118668. Bower offers a no obligation initial consultation to homeowners considering Equity Release.